Health care reform: a win-win for small business

By John Arensmeyer

Published: 2011.01.20 01:01 AM

Health care reform remains a hot topic, as shown in Tony Gagliardi's Jan. 13 column "Repeal: the New Year's resolution Congress should keep." In the wake of the vote by the U.S. House of Representatives to repeal the Patient Protection and Affordable Care Act, it's important to separate fact from fiction. They claim it hurts small businesses and the economic recovery, but the evidence suggests otherwise. Sharp rhetoric attacking health care reform may get headlines, but it does nothing to lower the cost of health insurance for America's 28 million small businesses.

Gagliardi's piece blasted the new health care law for increasing costs on small businesses, yet the cost of health insurance has already had disastrous consequences for small business owners across the country, forcing many to cut or forgo coverage, or lay off employees or put off growing their business in order to keep it. A study we released based upon research by MIT economist Jonathan Gruber found that without reform, employers would pay nearly $2.4 trillion in health care costs for their workers over the next decade.

Such dramatic costs would slash 178,000 small business jobs and $51.2 billion in profits in the same period. The study found that reform could reduce this burden by up to one-third. The status quo wasn't sustainable before the ACA was passed and still isn't, which is why health care reform's success is so critical to small businesses' survival.

Despite Gagliardi's assertion that small business owners oppose any attempt to correct the system, according to opinion polling we conducted of small business owners in 20 states across the country, 86 percent of those who don't offer benefits to their workers said they can't afford to, but 85 percent said they feel a responsibility to do so, while more than 80 percent supported two central provisions in the law¬-small business exchanges and the elimination of pre-existing condition restrictions.

The new law, while certainly not perfect, has a number of provisions that will help employers and the self-employed obtain more affordable and comprehensive coverage for themselves and their workers. Last year we released a report with Families USA showing that nearly 84 percent of small firms are eligible for the small business tax credits. These credits will help many small business owners provide insurance to their employees and save money that can then be used to create more jobs.

A survey of 619 small business owners we released on Jan. 4 showed that one-third of respondents who currently don't provide insurance would be more likely to do so because of the tax credits. Our poll found that the same percentage of small business owners not offering benefits said they'd be more likely to do so because of the insurance exchanges.

These competitive marketplaces, which go into effect in 2014, will enable small businesses to access lower-cost health care without sacrificing quality, and will allow them to pool their purchasing power so they can have the same kind of clout large businesses currently enjoy when negotiating for coverage. Their transparent nature will force insurance providers to price plans competitively, and plans will be required to offer a range of benefits that participants in the exchanges can compare, apples-to-apples. This means that small business owners can spend less time reading the fine print to decipher which plan is right for them, and more time hiring quality workers and growing their businesses.

A particular provision of the new law-the 1099 reporting requirement-was also mentioned in Gagliardi's piece. Though the Affordable Care Act has tremendous benefits for small businesses, the 1099 provision, which has nothing to do with health care reform and was included only as a revenue-raising measure, is not one of them. It would require small businesses to file a 1099 form for the purchase of any goods and services over $600, forcing them to spend an inordinate amount of time filling out paperwork instead of doing business. Legislation has been introduced in Congress to eliminate this provision, and we're confident a strong bipartisan vote in favor of this measure will pass that chamber soon.

Those who would deny small business owners the numerous advantages of reform don't have their best interests at heart. The political fighting over health care reform has dragged on for years and must end; it's time to roll up our sleeves and focus on building a health care system that will work better for the country's 28 million small businesses and the tens of millions of families that count on a small business paycheck. {pagebreak:Page 1}

John Arensmeyer is founder and CEO of Small Business Majority, a national nonprofit organization founded and run by small business owners. Contact John at john.arensmeyer@smallbusinessmajority.org or 866-597-7431

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